Thursday, January 26, 2017

Tax break for retired military sails through House committee

Posted By on Thu, Jan 26, 2017 at 2:23 PM

click to enlarge GRIFFIN: Stump-speech state of mind.
  • GRIFFIN: Stump-speech state of mind.

The House Revenue and Tax committee this morning approved a bill to create a tax exemption for military retirement pay. The exemption would also apply to surviving spouses.

The $13 million tax cut is paid for by removing exemptions on unemployment compensation, a tax on digital downloads, and increasing the sales tax on candy and soft drinks. The digital download tax was added this week in place of the removal of a sales tax exemption on mobile homes, which proved politically untenable.

It must be noted that the tax hikes on unemployment compensation and digital downloads weren't actually necessary to pay for the military retirement pay exemption. Those were included as pay-fors for an unrelated tax cut included in the bill's package: a $6.3 million giveaway to the soft drink industry via a reduction in the wholesale-level tax on soft drink syrup. (See more on this below.)

Lt. Gov. Tim Griffin spoke for the bill. His ten-minute yarn sounded like a stump speech for his future run for governor. "Our tax code's a mess from top to bottom," he said. Griffin said that he would like to scrap the entire code and start over. After his speech, he took questions and said that, regarding the pay-fors, "I'm not the governor...most people know that I might do things a little differently."

Rep. Kim Hendren supported the bill but raised the concern that college students and their families would end up being hit by the digital tax when they purchase books and supplies online. He complained that lobbyists for the manufactured housing industry had shifted the burden onto them. Hendren also noted that the legislature had rejected Rep. Warwick Sabin's earned-income tax credit bill, which would have been $10 million cheaper than the low-income tax cut it passed instead.

Rep. Michael John Gray raised a crucial point, noting that the bill has been larded up with another tax cut that has nothing to do with military retirement benefits. Gray asked why the bill also included a $6 million tax cut for the soft drink industry. That tax cut, Gray said, was "riding the coattails" of the more clearly popular and consensus idea of a tax cut for military retirement benefits. No one had a good answer.

Gray noted — a point confirmed by the Department of Finance and Administration — that the tax burden on soft drinks was being shifted onto consumers, while relief was provided for corporate interests in the soft drink industry.

He also noted — again confirmed by DFA — that the some of the pay-fors (tax increases!) really had nothing to do with the cost of the military retirement tax break. The soda and candy tax would pay for that on its own. The additional imposition of new taxes on unemployment benefits and digital downloads, Gray noted, is simply to pay for the giveaway to the soft drink industry.

The bill passed unanimously by a voice vote and will be on to the full House.

Tags: , , , ,

Favorite

Speaking of...

Comments (6)

Showing 1-6 of 6

Add a comment

 
Subscribe to this thread:
Showing 1-6 of 6

Add a comment

More by David Ramsey

Readers also liked…

  • In defense of Planned Parenthood and abortion rights

    An op-ed in today's New York Time by Katha Pollitt says what I've been struggling to say about the reaction to the attack on women's reproductive rights launched by means of the undercover videos made by anti-abortion activists.
    • Aug 5, 2015
  • Campus gun bill clears committee

    The so-called compromise amendment that will allow anyone 25 or older with a training certificate carry a concealed weapon on public college campuses was approved in a Senate committee this afternoon.
    • Feb 21, 2017
  • Maddie's Place makes a believer out of a skeptic

    After a long hiatus, I return to Maddie's Place in Riverdale and find the food is a lot tastier than I remembered.
    • Aug 19, 2015

Most Shared

Visit Arkansas

Forest bathing is the Next Big Thing

Forest bathing is the Next Big Thing

Arkansas is the perfect place to try out this new health trend. Read all about the what, why, where and how here.

Most Viewed

Most Recent Comments

Blogroll

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation